Property

Foreign retailers to lead rentals

Foreign shops are expected to lead in rental space, with a Savills report in February saying that international retailers are now excited to enter Vietnam following the announcement of various free trade agreements, which offer the prospect of reduced tariffs and simplified procedures.

AuchanSuper, 7-eleven, and Robinson Department Store have already staked out a sizeable presence in Vietnam’s retail market. Following the trend in other Asia Pacific countries, convenience stores are expected to gain a much larger proportion of the retail market share in the future.

Opposite to the strong investment wave from foreign outlets, there are only five large domestic retailers: Big C, Saigon Co.op, Mobile World, Nguyen Kim Trading, and Saigon Jewelry. Big C, however, is likely to be bought by a foreign retailer sometime soon. These domestic retailers have not revealed plans for expansion.

Among cities and provinces, Ho Chi Minh City will reach a key turning point in 2016, the report added. In the view of a CBRE report in January, meanwhile, the Ho Chi Minh City market will welcome 15 more stores from French retailer AuchanSuper this year. “This can improve the presence of foreign supermarket brands in Ho Chi Minh City, which is not quite strong at the moment,” CBRE wrote.

"The young population and rapidly growing middle class are the two major factors that are driving retail market growth," the Savills report stated. "These customers are now more aware of their spending power and are seeking modern and convenient retail environments. We are now seeing a growing number of such shopping centers in new residential areas like District 2, District 7, and Go Vap district, to meet this blooming demand.”